Ganesh Jewellery plans IPO

Rs 200 crore float to enable expansion in domestic market.

Kolkata-based Shree Ganesh Jewellery, one of the largest exporters of hand-made gold and studded jewellery, plans to tap the capital market with an initial public offer (IPO) of Rs 200 crore.

The company, which is currently 100 per cent held by the Parekh family, will be offloading a 3 per cent stake to a private equity firm through a pre-IPO placement. US-based private equity funds New Vernon and India Equity Partners are learnt to have expressed interest in the company. Post-issue, 25 per cent of the company's shares will be held by the public.

Shree Ganesh Jewellery Chairman Nilesh Parekh said, "We are planning to tap the capital market with our initial public offer of Rs 200-210 crore." The company has appointed UTI Bank and Motilal Oswal as the bankers to the issue. The funds raised would be used for expansion of the manufacturing facility.

The draft red herring prospectus (DRHP) is expected to be filed with the capital market regulator, Sebi, shortly. The company has appointed Crisil to do its IPO grading.

With an exports turnover of Rs 750 crore, Shree Ganesh Jewellery has a manufacturing capacity of 10 tonnes of hand-crafted gold jewellery and 8,000 kg of machine-made gold jewellery. It plans to beef up this production capacity to 1,50,000 kg of gold jewellery in the near future.

Predominantly a jewellery exporter, the company intends to make its presence felt in the domestic market as well. It has already entered airport retailing through its designer brand Gaja, which is retailed at the Dubai duty-free market.

Shree Ganesh Jewellery also aims to extend it to other airports such as Abu Dhabi, Heathrow, Toronto, Singapore, Hong Kong and other overseas markets.It plans to open ten exclusive Gaja showrooms in India.

Last week, another jewellery exporter, Renaissance Jewellery, filed a DRHP with the Sebi to enter the capital markets with a public offer of 53.24 lakh equity shares. The issue would also comprise warrants in the ratio 1:2, with 29 per cent and 37.99 per cent of the fully diluted post-issue paid-up capital before and after the exercise of warrants. With these two companies tapping the stock markets, the number of listed jewellery companies would inch towards 25.

According to a report published by the Gems and Jewellery Export Promotion Council and KPMG, high-value raw materials have made the jewellery industry capital intensive and low transparency has led to a premium on financing. It states that industry can reduce this cost and improve access to funds if individual players embrace transparency and go public.